Free Entry -- an under-recognized aspect of the Free Market

Perhaps the most overlooked element of a free market -- amongst free trade, free exchange, etc. -- is the concept of free entry into the market.  Probably the single largest hurdle to the general acceptance of free markets is the problem of monopoly.  The fear is that, in a free market, the inevitable outcome of market activities would be either a single firm or a collection of firms conspiring together (a cartel) dominating the market.  What is chiefly overlooked here is that a truly free market also allows for free entry into the market, which is the single most important counterbalance in the system.  The fact that this is overlooked speaks directly to the degree to which free entry is not permitted in most current and historical markets -- in fact it is almost inconceivable that such a force would come into play in a free market system.

The simple fact is this: in order for a firm or a cartel to even attempt to dominate a market, they necessarily introduce bads alongside their goods or else their goods simply become bads.  To understand this, let's examine the nature of monopoly itself: under a monopolistic system, there is a tendency for the quantity and or quality of goods to decrease while the price of those goods increases.  Right?  That is the entire fear of monopoly in a nutshell.  So they are essentially producing less goods.  What is the bad?  Through their monopolistic behavior, they are preventing other producers from competing with them.  Well the solution here is obvious -- if a monopolist or would-be monopolist is producing fewer goods at a higher price, then it should be quite simple for another producer -- if even on a small or localized scale -- to produce better quality goods at a lower price.  Would not then, almost immediately, consumers turn to this new producer for those goods? If you dispute that, then why will thousands of people line up outside Best Buy on Black Friday to save a few bucks on a television set?  Consumers aren't dumb -- they are constantly looking for the best deal and taking their business there.

So the only way, truly, for a monopoly to succeed is to prevent free entry into their market.  It would be impossible to do so economically for a monopolistic entity to do so -- they would have to buy up every would-be competitor, and constantly forcing their business partners to take anti-consumeristic behavior in order to economically prevent free entry.  This would crush them very quickly, as the costs would be too great.  So the only mechanism for truly preventing free entry into a system is ultimately violence: competitors or would be competitors must ultimately be coerced (through violence or the threat thereof) to not compete.  But in a free market system, where property rights are considered absolute, such behavior would likewise be extraordinarily costly, as a monopolist or would-be monopolist would either lose their own security provider, be forced to pay exorbitant rates by their security provider, AND would be the target of every other security provider in the entire world.

Monopoly is only possible in the absence of free entry into a market.  Free entry can only be suppressed through a violation of property rights.  A free market respects property rights.  Therefore, a monopoly is impossible in a free market.